Understanding the Role of a Trustee in a Professional Management Association (PMA) with ProAdvocate Group

A Professional Management Association (PMA) is a legal structure commonly used in the construction industry, allowing individuals to work together on specific projects. But who manages the affairs and oversees the financial aspects of this association? This is where the Trustee comes in. So what is the role of a trustee?

Understanding the Role of a Trustee in a Professional Management Association (PMA) with ProAdvocate Group

What is a Trustee in a PMA?

The Trustee is the individual legally responsible for the overall management and control of the PMA. They hold the assets and manage the finances, ensuring the association complies with legal and tax obligations. This includes:

  • Maintaining financial records and accounts
  • Preparing and filing tax returns
  • Distributing profits or losses to members
  • Making financial decisions on behalf of the PMA
  • Ensuring proper recordkeeping and documentation

Responsibilities of the Trustee:

The Trustee’s primary responsibility is to act in the best interests of the association and its members. This includes:

  • Fiduciary duty: The Trustee must act with honesty, loyalty, and good faith, avoiding any self-dealing or conflicts of interest.
  • Prudent management: The Trustee must exercise sound judgment and manage the PMA’s assets responsibly.
  • Compliance with laws and regulations: The Trustee ensures the PMA adheres to all applicable legal and tax requirements.

Successor Trustee: Ensuring Continuity

A Successor Trustee is a designated individual who takes over the responsibilities of the First Trustee if the latter is unable to fulfill their duties due to incapacity or death. This ensures the smooth operation of the PMA even in unforeseen circumstances.

Choosing a Successor Trustee:

The Trustee has the authority to appoint a Successor Trustee. This decision shouldn’t be taken lightly.

Key Points to Consider:

  • Trustworthiness and competence: Choose someone with good judgment, financial responsibility, and the ability to understand the complexities of managing a PMA.
  • Availability: Select someone who is willing and able to dedicate time and effort to fulfilling the role when needed.
  • Communication and agreement: Discuss the responsibilities and expectations clearly with the chosen individual and ensure they are comfortable taking on the role.

Is a Successor Trustee Mandatory?

While not legally mandatory, having a designated Successor Trustee is highly recommended. Without one, the process of appointing a successor can become complex, potentially delaying crucial decisions and impacting the PMA’s operations.

Changing or Adding Trustees Later:

Modifying the originally designated Trustee requires amending the PMA’s Articles of Association. This process typically involves a vote by the members and may incur legal fees.

ProAdvocate Group: Your Partner in Effective PMA Management

At ProAdvocate Group, we understand the importance of proper PMA management and the critical role of the Trustee. We offer professional guidance and support to all parties involved in PMAs, including:

  • Assisting with the selection and appointment of Trustees
  • Providing guidance on legal and tax obligations
  • Offering support in managing financial records and accounts
  • Helping navigate the process of amending the Articles of Association

For more information about PMAs and how we can help ensure your association’s success, contact ProAdvocate Group today.